Exercise 5-4 Perpetual: Income effects of inventory methods LO A1
| Laker Company reported the following January purchases and sales data for its only product. |
| Date | Activities | Units Acquired at Cost | Units Sold at Retail | |||||||||||||
| Jan. | 1 | Beginning inventory | 230 | units | @ $8.60 | = | $ | 1,978 | ||||||||
| Jan. | 10 | Sales | 130 | units | @$16.60 | |||||||||||
| Jan. | 20 | Purchase | 300 | units | @ $7.60 | = | 2,280 | |||||||||
| Jan. | 25 | Sales | 225 | units | @$16.60 | |||||||||||
| Jan. | 30 | Purchase | 170 | units | @ $6.60 | = | 1,122 | |||||||||
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| Totals | 700 | units | $ | 5,380 | 355 | units | ||||||||||
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| Laker uses a perpetual inventory system. For specific identification, ending inventory consists of 345 units, where 170 are from the January 30 purchase, 80 are from the January 20 purchase, and 95 are from beginning inventory. |
| 1. | Complete comparative income statements for the month of January for Laker Company for the four inventory methods. Assume expenses are $2,400, and that the applicable income tax rate is 39%. (Do not round your Intermediate calculations.)
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